The liquidator of Setanta Insurance believes there will not be sufficient funds to meet outstanding claims in full, Fianna Fáil spokesman on finance Michael McGrath has said, adding that former Setanta policyholders could be held personally liable for outstanding claims.
Mr McGrath said the Central Bank of Ireland had confirmed to him in correspondence that the liquidator of Setanta Insurance believes there will not be sufficient funds to meet all claims.
The Dublin-based insurer, which was licensed in Malta but traded only in Ireland, went into liquidation in April leaving 75,000 motor policyholders in Ireland with no cover. It had been selling mainly commercial motor insurance through brokers and was known as a low-cost operator.
Mr McGrath has called on the government to establish an expert group to examine the options available, and to recommend solutions to what he described as the “nightmare scenario” now facing over 2,000 people with outstanding claims lodged with the Setanta Insurance liquidator.
“We know from evidence given by Department of Finance and Central Bank officials to the Joint Oireachtas Finance Committee in July that about 2,000 claims with a total value of €35 million are on the books of the Setanta liquidator. These figures are expected to rise significantly as claims may not yet have been lodged for accidents that have occurred. The liquidator of Setanta Insurance has now confirmed to the Central Bank that there is insufficient money available to meet the claims in full,” he said.
He said the Insurance Compensation Fund (ICF) will only pay out 65 per cent of the total claim or €825,000, whichever is the lesser, adding that the ICF does not apply to certain claims.
It is unclear at this stage how much the outstanding third-party claims left in the wake of Setanta’s collapse will amount to as many are still being processed.
Setanta was founded by Mike Matthews in Ireland in 2007 with the backing of individual investors. Mr Matthews left the company in 2011, claiming that investors had failed to back his vision to grow the business.
